Bailout plan details unveiled

Details of the $700 billion bailout plan of Wall Street were unveiled today as a rancorous Congress continues to debate the issue. From an L.A. Times story:

Congressional and administration officials unveiled their $700-billion rescue plan for Wall Street today, setting up the largest government intervention in the economy since the Great Depression.

The plan includes a program to purchase bad assets and an insurance program to underwrite others. It would also require the government to gain an equity stake in companies that benefit from the rescue, ensuring that taxpayers would make money once the assets regained some value. And the deal would require curbs on executive pay and the $700 billion to be released in installments...

The 110-page bill is posted on the website of the House Financial Services Committee. It is expected to be voted on by the House as soon as Monday and by the Senate on Wednesday...

But the plan faces fierce opposition from Republicans and Democrats angry at what they say is a taxpayer bailout of Wall Street "fat cats." As the House opened for an unusual Sunday session, lawmakers from both parties rose, one after another, for one-minute speeches denouncing the agreement -- and signaling a continuing struggle as policymakers and their staff work out the final details...

Both caucuses will be meeting in the afternoon, including a Democratic offshoot called the "skeptics caucus," at which members will hear from economists who oppose the bailout plan.

In separate appearances on the Sunday talk shows, both presidential nominees said they were inclined to vote for it.

"I'd like to see the details, but hopefully yes," Sen. John McCain of Arizona, the Republican candidate, said on ABC's "This Week." "And the outlines that I have read of it, that this is something that all of us will swallow hard and go forward with. The option of doing nothing is simply not an acceptable option."

Sen. Barack Obama of Illinois, the Democratic nominee, told CBS' "Face the Nation," "Ultimately, I believe that we have to get something done. And so if I feel that those are meaningful provisions that provide some constraints on how the Treasury operates, and this is not going to be welfare for Wall Street, then my inclination is to support it because I think Main Street is now at stake. This could affect every sector of the economy."

The rescue plan, which grew from a three-page proposal sent to Capitol Hill by the Treasury secretary a week ago to more than 100 pages, would allow the federal government to purchase bad debts from ailing financial institutions in an effort to stave off more bankruptcies and provide cash for new loans to ease the credit market freeze-up.

The plan is expected to call for the money to be made available in installments instead of one enormous lump sum. It is also expected to include additional oversight of the government's spending, limits on the pay of executives of firms that receive government aid, help for homeowners at risk of foreclosure and a provision that taxpayers share in any profits from the sale of distressed assets...

"I think the devil is in the details," Rep. Eric Cantor of Virginia, the GOP deputy whip, said on CNN's "Late Edition." "And, as you know, in Washington there may be a tentative deal, but oftentimes when the writing starts, the renegotiations begin. . . . I think the important thing that the Republican members in the House want to see is that taxpayers are not the ones left holding the bag."...

House Republicans, who have been critical of the growth in government spending under Bush, have been pushing to reduce the cost of the bailout. Unlike the president, they must stand for reelection this fall, and are willing to break with Bush as they try to reclaim the mantle of fiscal responsibility.